Commissioners OK health rate plan

It was a rare moment in the drawn out and highly partisan health care debate: a unanimous vote.

The National Association of Insurance Commissioners approved Tuesday morning a preliminary outline of what insurers will be able to count as medical costs, a document necessitated by the health reform bill’s requirement that insurers spend at least 85 percent of subscriber premiums on medical costs in the large group market and 80 percent for small group and individual plans.

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Despite divided political views on the health reform law, all commissioners voted together to approve the document, a move forward that drew the ire of insurers.

“It’s extremely noteworthy that you heard … very diverse perspectives on the bill and the impact of the bill, but the vote was unanimous,” NAIC CEO Terri Vaughan told POLITICO after the vote. “That’s a very powerful statement on the hard work this organization did.”

The commissioners moved forward with a proposed “blank,” NAIC terminology for an insurers’ filing document, as well as 10 of 11 proposed amendments. They approved amendments that narrow inclusions of utilization review in the calculation and expand the definition of "wellness and health promotion activities" to include "public health marketing campaigns that are performed in conjunction with state or local health departments."

The one rejected amendment would have allowed insurers to count accreditation fees as a “quality improvement” cost, thus making it a part of medical spending.

While insurance commissioners moved forward unanimously, familiar fault lines emerged between consumer advocates and industry over the document and how it categorizes medical spending.

“In general, we are very pleased,” said NAIC consumer advocate Timothy Jost, a professor of health policy at Washington & Lee University. “The process has been very open and participatory. We feel like our concerns have been listened to.”

America’s Health Insurance Plans, the trade organization that represents health insurers, was unenthused about the document and warned of dire consequences. AHIP circulated a letter detailing its concerns with what will be counted as a quality improvement, urging that spending on complying with new "ICD-10" coding requirements, which require upgrading systems tailored to ICD-9 specifications, and anti-fraud efforts ought to make the cut.

“The NAIC is conducting a transparent and thorough process as it develops the [medical loss ratio] MLR definition, but the current proposal could have the unintended consequence of turning back the clock on efforts to improve patient safety, enhance the quality of care and fight fraud,” AHIP president Karen Ignagni said in a statement. “Preserving patients’ access to high-quality health care services is essential if the key goals of health care reform are to be achieved.”